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Volvo insists it won’t sell the new V40 hatchback in the U.S. It cites the fact that BMW has never sent its 1 Series hatch across the Atlantic, and Audi sold very few A3 Sportbacks here. But we’ve learned that Mercedes is planning to launch the similarly sized A-Class in the U.S. by 2014, so we wonder if by then the market might be ready for a direct competitor from Volvo.

The 2012 Volvo V40 marks the first time in 16 years that Volvo has had a car to compete in one of Europe’s biggest segments: the compact hatchback. More important, it represents a new commitment to the driver. Volvo CEO Stefan Jacoby is German, and came from VW. He has installed fellow countrymen in key positions. And he insists Volvos, and specifically this Volvo, will go head-to-head with BMW and Audi in the driving dynamics department.

To show his intent, at a brief prototype drive attended by Motor Trend, his people fielded a latest-generation BMW 1 Series hatchback to try back-to-back with his new baby.

But despite the newfound driving pleasure, it’s business as usual on the safety front. Volvo remains a leader, employing a bewildering number of safety systems.

Among them is the world-first pedestrian airbag. Sensors in the front bumper are programmed to identify a human leg impact. They then fire an airbag that’s packaged near the wiper pivots; it that lifts the trailing edge of the engine hood , and unfurls to soften the area at the base of the windshield and A-posts. You might have noticed how recent European cars have ungainly raised hoodlines recently. This is because they need to provide a crush space between hood and engine to cushion pedestrians. The Volvo airbag does the same thing, only better, and allows the designers to go for a lower, sleeker silhouette.

In any case, the V40 really, really doesn’t want you to hit anyone on foot or bicycle. It has a pedestrian recognition system using both radar and a camera, and it can auto-brake if you don’t. Other camera-based systems include lane-keeping assist and road-sign recognition. Radar is used for a follow-to-stop active cruise control, while the City Safety brake system relies on lasers.

Volvo has also augmented its side blind-spot warning, with radar sensors keeping an eye on fast-approaching traffic from the rear quarters as well as the vehicles at your side. Finally, there’s a radar on the rear bumper to watch your back if you’re reversing out of a perpendicular space into traffic. Even scanning the spec sheets of the new Mercedes A-Class and Audi A3, we struggle to see another compact car anywhere with so much standard and optional driver-assist gadgetry.

The exterior design follows typical Volvo cues in the nose, and the familiar shouldered taillights. On the side we get a scallop on the rear door, and behind the hexagonal glass — both features designed to put us in mind of the P1800ES.

Inside, it’s pared-back Scandinavian-themed design, with simple shapes, an open architecture, and silk or matte-finished surfaces. Most versions have a configurable all-TFT instrument set. We love the seat comfort, and the huge range of sensible storage bins and pockets. This car feels like it’s designed for real lives.

Several months before the on-sale date, Volvo allowed a posse of European Car of the Year jurors to drive some prototypes. The track was short, wet, and greasy, and too smooth to tell us much about ride comfort. But it had a useful range of dipping and cresting corners.

The 150 and 180-hp gasoline engines are from Ford’s 1.6-liter EcoBoost family. Urge flows smoothly from a wide torque well into a neat high-rev hum. The power doesn’t trouble the chassis, which Volvo says “uses learnings from the S60,” a car that scored high marks in our MT sport sedan face-off.

The V40 turns eagerly, doesn’t melt into understeer, and provides decent steering feel and an opportunity to trim the line with the throttle, even with the stability systems on. That system uses a roll-angle sensor to provide better predictive ability of any grip loss, so it acts subtly and progressively.

The 2.0-liter diesel is Volvo’s own five-pot design. It makes a charismatic sound and goes well, but its weight is obvious as you turn through the first half of a tight corner. The big-seller will be the lighter, 115-hp, 1.6-liter diesel. Volvo says it has class-leading fuel economy and CO2 emissions, which qualify it for tax breaks in many European countries.

The short straight is good for about 85 mph at the far end, at which rate we didn’t detect any appreciable engine or wind noise. So while the drive was brief, it was enough for me to say that the BMW 1 Series there for comparison felt less agile than the Volvo.

In Europe, the new V40 replaces both the S40 sedan and V50 wagon, cars both withdrawn from the U.S. after 2011. While we aren’t likely to see the V40 here, Volvo reportedly has plans for a compact XC40 crossover off the V40 architecture, and possibly a new sedan that Volvo is expected to debut a couple of years from now, primarily for China. After all, it’s a Chinese-owned company now, and it wants to grow its presence there.